Global demand for silicon chips, embedded in everything from smartphones to TVS to wind turbines, is booming, but it comes at a huge cost: carbon emissions.
The industry presents a paradox. Meeting global climate targets will depend in part on semiconductors. They are an integral part of electric cars, solar arrays and wind turbines. But chip manufacturing is also contributing to the climate crisis. It requires a lot of energy and water -- chip factories or fabs can use millions of gallons of water a day -- and produces hazardous waste.
As the semiconductor industry finds itself under increasing scrutiny, it is beginning to deal with its climate impact. Last week, TSMC, the world's largest chipmaker, which supplies Chips to Apple, pledged to achieve net zero emissions by 2050. TSMC's chairman said the company aimed to "expand our green presence and drive the industry towards low-carbon sustainable development".
But decarbonising the sector will be a big challenge.
TSMC alone uses nearly 5 percent of Taiwan's total electricity, which is expected to rise to 7.2 percent in 2022, using about 63 million tons of water in 2019, according to Greenpeace. The company's water use became a controversial topic during Taiwan's drought this year.
In the U.S., Intel's 700-acre plant in Ocotillo, Ariz., generated nearly 15,000 tons of waste in the first three months of this year, about 60% of which was hazardous. It also consumes 927 million gallons of fresh water, enough to fill some 1,400 Olympic swimming pools, and consumes 561 million kilowatt hours of energy.
Chip manufacturing, rather than energy consumption or hardware use, "accounts for the majority of carbon emissions from electronic devices," Wrote Harvard University researcher Udit Gupta and co-authors in a 2020 paper.
A global shortage of high-end chips as the pandemic increases demand for electronics and the COVID-19 outbreak shuts down fabs has added to the focus on the industry.
In a tight market, automakers have found themselves at the back of the chip queue, far behind larger semiconductor customers like Apple, which use chips to provide computing power for smartphones, laptops and other devices. Gm halted production at several of its North American plants this month, while Toyota said it would cut its vehicle production by 40 per cent in September.
To increase production, many countries are launching large programs to boost the industry.
The U.S. Chip Act proposes $52 billion over five years for the U.S. semiconductor industry. The European Union has submitted its own legislation aimed at increasing its share of the global chip market to 20 percent by 2030. European Commission President Ursula von der Leyen called it a "question of technological sovereignty" in her State of the Union address.
These ambitions are potentially in conflict with international climate targets. The European Union and the United States aim to achieve net zero carbon emissions by 2030 and net zero emissions by 2050. As the semiconductor industry grows, so will its carbon emissions.
However, under pressure from investors and electronics manufacturers eager to report greener supply chains to customers, the semiconductor business has been stepping up its actions to address its climate impact.
"Recently, I've started to see our impact on the environment completely come to the forefront," said Sohini Dasgupta, Principal design engineer at On Semiconductor.
Fund managers are increasingly promoting "green funds" as investors ask more questions about companies' environmental, social and governance (ESG) impact, says Mark Li, semiconductor analyst at Bernstein, an investment firm. "In the last three years, ESG investments have become a lot more vocal," he says, adding that this will eventually change the way the company behaves.
The greater availability of renewable energy is helping chipmakers reduce carbon emissions. Intel has pledged to get 100 percent of its energy from renewable sources by 2030, as has TSMC, but with a deadline of 2050.
Energy consumption accounts for 62 percent of TSMC's emissions, according to TSMC spokeswoman Nina Kao. The company last year signed a deal with Danish energy? Rsted has signed a 20-year agreement from? Rsted buys all the energy for the 920 megawatt offshore wind farm it is building in the Taiwan Strait.
The deal, described as the world's largest corporate renewable energy purchase agreement, is good for TSMC, said Shashi Barla, renewable energy analyst at energy consultancy Wood Mackenzie. As well as ensuring clean electricity, it pays wholesale costs and gets rid of price shocks, "killing two birds with one stone", he says.
Clifton Fonstad, a professor of electrical engineering and computer science at the Massachusetts Institute of Technology, said TSMC's move had the potential to affect the industry and that "other manufacturers could follow suit".
Peter Hanbury, an expert in semiconductor manufacturing at Bain & Company, the management consultancy, said chip makers could improve the efficiency of their fabs in addition to switching to renewable energy. A chip plant is basically "a huge warehouse with clean rooms inside" and "the easiest part to reduce emissions is the facility itself," he said.
The fabs can regulate air and water temperature, humidity and pressure more efficiently. They can segment the warehouse so that one line has high pressure and the other line has low pressure, using less energy than keeping the entire warehouse under high pressure.
They can capture more data and use machine learning to turn off tools when not in use, says Huili Grace Xing, an engineering professor at Cornell Who works on semiconductor materials.
There are also innovations aimed at addressing the dirtiest materials used in making semiconductors. The chip industry uses different gases in its manufacturing process, many of which have a significant impact on climate.
TSMC said it had installed scrubbers and other facilities to deal with the emissions. But another approach is to replace the "dirtier" cleaner gases used to clean precision tools used in semiconductor manufacturing, says Michael Pitloff, a chemical engineer at Solvay Specialty Chemicals who works on semiconductor gases.
In industrial tests with about half a dozen chipmaker customers over the past six years, Pitloff said, he and his team have replaced the dirtier gas with "cleaner" fluorine, which has a lower global warming impact.
Other companies are aiming to etch patterns on wafers and clean the surface of the wafers of gas - the thin sheet material used to make semiconductors. For example, Air Liquide, a Paris-based industrial gases company, has proposed a range of alternative etching gases that have a smaller impact on global warming.
But replacing the gas will be a challenge: Once the fabs are up and running, anything that touches the silicon wafers, such as etching gas, is hard to change, Hanbury said. This process involves a great deal of precision. Fabs must place up to 100 million transistors on stamp-sized wafers, and they need to do it perfectly. It takes four to five years for a fab to develop a formula, Hanbury said, and "once you set it, you basically don't want to change it."
Some experts believe chip makers will start modifying their processes to introduce more environmentally friendly gases, especially if big companies take action." "If TSMC switches, I'm sure others will," Fonstad said. If TSMC does not do so, then other manufacturers may turn around and prove they are better than TSMC. "
To some observers of the chip industry, the determination to clean it up seems real. Li said the current huge demand for chips will only help the semiconductor industry achieve its sustainable development goals.
They have high margins and make a lot of money. So even if all these green carbon measures have a cost, they can afford it. And more and more customers are willing to pay more for greener equipment, "he said.